Trust Income Tax Calculator
Here’s a comprehensive table summarizing the key points about Income Tax for Trusts in the UK, effective from April 6, 2024:
| Category | Details |
|---|---|
| Taxable Income Limit | Income up to £500 is tax-free for trusts and estates27. |
| Tax Rates (2024) | – Dividend income: 39.35% – All other income: 45% – For interest in possession trusts: • Dividend income: 8.75% • All other income: 20%13 |
| Tax Filing Requirements | Trusts with income of £500 or less do not need to file tax returns2. |
| Standard Rate Band | Abolished from April 6, 2024136. |
| Multiple Trusts | £500 limit is reduced proportionately for multiple trusts created by the same settlor, with a minimum of £100 per trust237. |
| Capital Gains Tax | Annual exempt amount reduced to £1,500 from April 6, 20243. |
| Bare Trusts | Beneficiary is responsible for paying tax on income, using their Personal Allowance4. |
| Settlor-Interested Trusts | Settlor is responsible for Income Tax, but trustees pay it as they receive the income4. |
| Tax Pool Mechanism | Tax pool varies between 39.35% to 45% depending on income type, even for trusts with income below £50023. |
| Non-UK Resident Trusts | Special tax rules apply4. |
| Vulnerable Beneficiary Trusts | Not subject to the £500 limit reduction for multiple trusts27. |
| Other Considerations | – Review tax positions annually as rules may change. – Trusts do not qualify for dividend allowance4. – ISA income remains exempt for estates for up to 3 years following death7. |
This table provides a comprehensive overview of the Income Tax rules for trusts in the UK, effective from April 6, 2024. It covers the new tax-free limit, tax rates, filing requirements, and special considerations for different types of trusts. Remember that tax laws can be complex and subject to change, so it’s advisable to consult with a tax professional for specific situations.